September 11, 2019 / 7:37 PM / 4 days ago

EMERGING MARKETS-Latam stocks buoyed by stimulus hopes, trade optimism

 (Updates prices, adds analyst quote)
    By Ambar Warrick
    Sept 11 (Reuters) - Most Latin American stocks rose on
Wednesday as the prospect of increased stimulus for major
economies and positive cues from the Sino-U.S. trade front aided
risk appetite, while currencies were mixed ahead of the European
Central Bank's policy decision. 
    MSCI's index of Latin American stocks rose
1.3%, holding near a one-month high, mirroring gains across
global stock markets.
    Investors perceived as conciliatory a move from China to
exempt certain U.S. products from additional retaliatory tariffs
for a year.
    Markets also awaited the European Central Bank's monetary
policy meeting on Thursday, where officials are widely expected
to trim interest rates and introduce a stimulus package to shore
up economic growth.
    Brazilian stocks firmed about 0.5%, with most
support coming from consumer discretionary stocks after data
showed that retail sales for July marked their best rise this
year.
    Retailers Lojas Renner SA and Magazine Luiza SA
 rose about 2.5% and 4.6%, respectively, and were
among the biggest boosts to the Bovespa. 
    Chilean stocks rose about 1.6% to a more than
one-month high as the country's equities continued to recover
from a 2-1/2 year low in late-August.
    Mexican and Colombian equities added about
0.1% and 0.6%, respectively.
    Mexico's government will give state-owned Pemex $5 billion
so the world's most indebted oil company can pay off bonds, the
company said earlier in the day.
    Latin American currencies were mixed against a stronger
dollar, with Brazil's real rising about 0.5% on
the stronger retail sales reading. However, broader economic
weakness in the country is expected to push Brazil's central
bank to cut interest rates at a policy meeting next week.
    The central bank has already cut interest rates to a record
low of 6.00%.
    "There's still an easing bias after this, so the market's
obviously priced in a further easing trajectory from the BCB,"
said Sacha Tihanyi, deputy head of emerging markets strategy at
TD Securities.
    "Chances are it (the real) is going to be dependent on broad
dollar moves. Today's a bit of a deviation however, as the
dollar's doing well against the euro." 
    The Chilean peso dropped 0.6% as prices of copper,
the country's top export, dipped after a sharp fall in Chinese
auto sales raised fears of weaker demand.
    Chile's central bank Governor Mario Marcel told Reuters that
Chile could be heading for its third interest rate cut within
six months, with trade and political tensions adding much
pressure on the economy.
    Latin American stock indexes and currencies at 1921 GMT: 
         
 Stock indexes                                 Daily % change
                                 Latest     
 MSCI Emerging Markets             1017.42               0.92
                                            
 MSCI LatAm                        2695.19               1.32
                                            
 Brazil Bovespa                  103507.04               0.46
 Mexico IPC                       42618.79               0.07
 Chile IPSA                        4957.00                1.6
                                            
 Argentina MerVal                 28704.84              0.959
                                            
 Colombia IGBC                    12826.69               0.56
                                            
                                                             
 Currencies                                    Daily % change
                                            
                                    Latest  
 Brazil real                        4.0615               0.82
                                            
 Mexico peso                       19.5238              -0.17
                                            
 Chile peso                            716              -0.61
                                            
 Colombia peso                      3374.1              -0.43
 Peru sol                            3.338               0.15
                                            
 Argentina peso (interbank)        56.1700              -0.21
                                            
 



 (Reporting by Ambar Warrick in Bengaluru; Editing by Cynthia
Osterman)
  
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